Fort Smith woman be­gins sen­tence for Ponzi scheme

Northwest Arkansas Democrat-Gazette - - NORTHWEST ARKANSAS - BILL BOW­DEN

A 66-year-old Fort Smith woman has re­ported to a fed­eral prison in Texas to be­gin serv­ing a 50-month sen­tence in con­nec­tion with a mul­ti­mil­lion-dol­lar Ponzi scheme she ran through her com­pa­nies in New Jersey.

Shirley Sooy, an Arkansas na­tive, pleaded guilty last year in fed­eral court in Newark, N.J., to wire fraud and money laun­der­ing in con­nec­tion with the Ponzi scheme.

She be­gan serv­ing her sen­tence on July 10 at Fed­eral Med­i­cal Cen­ter, Car­swell in Fort Worth, which has a min­i­mum-se­cu­rity satel­lite camp.

Pros­e­cu­tors said in 2014 Sooy and her co-con­spir­a­tors net­ted $42 mil­lion through the scheme and used some of that money to buy a $135,000 Maserati au­to­mo­bile and a 48-foot yacht.

They sub­si­dized mil­lions of dol­lars in per­sonal ex­penses, ac­cord­ing to the crim­i­nal com­plaint.

The money was used to make mort­gage pay­ments on per­sonal prop­er­ties owned by Sooy and oth­ers in Blooms­bury, Phillips­burg and Ware­town, N.J., as well as Palm Beach Gar­dens, Fla. Some of the money was also used to make pay­ments on per­sonal credit cards and to re­model Sooy’s home, ac­cord­ing to the court fil­ing.

In May, U.S. District Judge Wil­liam Walls sen­tenced Sooy to 50 months in prison on each of two counts, with the sen­tences to run con­cur­rently. He also or­dered her to pay $1,185,404 in resti­tu­tion.

Sooy owned a group of freight pay­ment, lo­gis­tics and ship­ping busi­nesses head­quar­tered in Branch­burg, N.J. The com­pa­nies op­er­ated un­der the um­brella name Tran­sVan­tage Group.

From 2010 through 2013, through Tran­sVan­tage, Sooy en­tered into con­tracts with four un­named “vic­tim com­pa­nies,” ac­cord­ing to the crim­i­nal com­plaint.

But in the judg­ment, is­sued in May, 20 vic­tim com­pa­nies were listed. Those with the great­est losses from the Ponzi scheme were John­son Con­trols Inc. of Ply­mouth, Mich., with a loss of $399,936; Am­cor Rigid Plas­tics USA of Manch­ester, Mich., with a loss of $184,246; and Albe­marle Corp. of Ba­ton Rouge, with a loss of $108,769.

“Tran­sVan­tage au­dited freight bills gen­er­ated by com­mon car­ri­ers and freight for­warders hired by the vic­tim com­pa­nies,” ac­cord­ing to a news re­lease in May from act­ing U.S. At­tor­ney Wil­liam Fitzpatrick of New Jersey.

Tran­sVan­tage was sup­posed to pay the au­dited and ap­proved freight bills from funds pro­vided by the vic­tim com­pa­nies, ac­cord­ing to Fitzpatrick. The funds were to be held in trust by Tran­sVan­tage un­til paid over to the car­ri­ers.

But in­stead of pay­ing the car­ri­ers the amount due, Sooy and oth­ers com­min­gled the funds from the vic­tim com­pa­nies and then mis­used those funds in var­i­ous ways, ac­cord­ing to the news re­lease.

Ac­cord­ing to charges filed in fed­eral court, Sooy served at dif­fer­ent times be­tween 2003 and 2008 as di­rec­tor of oper­a­tions and pres­i­dent of Tran­sVan­tage. Be­gin­ning in 2010, she be­came the sole share­holder of the com­pany.

Ac­cord­ing to the ini­tial com­plaint, the scheme be­gan to un­ravel in May 2013 when one of the vic­tim com­pa­nies learned its car­ri­ers hadn’t been paid by Tran­sVan­tage, even though the vic­tim com­pany had paid Tran­sVan­tage.

Dur­ing an au­dit in 2013, Sooy stated that a mul­ti­mil­lion-dol­lar “cash hole” had ex­isted at Tran­sVan­tage for years, and that a vic­tim com­pany’s money was used to “fill the hole,” ac­cord­ing to the com­plaint. Sooy told au­di­tors some of the vic­tim com­pany’s money had been in­vested and lost in the stock mar­ket years ear­lier, ac­cord­ing to the court doc­u­ment.

In a 2013 de­po­si­tion, Sooy stated she went into “panic mode” when she learned in 2010 a co-con­spir­a­tor had used some of the vic­tim com­pa­nies’ money to make loans to third par­ties, and Tran­sVan­tage had a deficit.

“She nonethe­less con­tin­ued to op­er­ate Tran­sVan­tage and did not in­form the vic­tim com­pa­nies,” ac­cord­ing to the crim­i­nal com­plaint.

In 2010, the amount that had been paid by the vic­tim com­pa­nies, but which was not used to pay car­rier freight bills, was about $13 mil­lion, ac­cord­ing to the crim­i­nal com­plaint.

“By 2013, when the scheme col­lapsed, it was ap­prox­i­mately $42 mil­lion,” ac­cord­ing to the court doc­u­ment.

The own­ers of other com­pa­nies then re­al­ized they too were vic­tims.

Shirley Dar­lene Rauls Sooy of Dac­ula, Ga., mar­ried Ron­ald Thomp­son of Fort Smith on May 9, 2014, in Fort Smith, ac­cord­ing to records of the Se­bas­tian County clerk’s of­fice. The bride and groom were both 63 years old at the time of the mar­riage, and both were born in Arkansas.

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